Beyond Meat slides after lead underwriter downgrades stock

Placement in the meat aisle is

Is alternative meat the future of dining?

The price has surged between 570 per cent and 650 per cent and on Tuesday, industry analysts with JP Morgan had enough - but not for fear that there isn't more room to run for the plant-based alternative to beef.

"The double-digit growth in the sector is largely driven by meat eaters who want the health and nutrition that they perceive to come from plants along with the taste they've always had from animal protein", Whitmore said, adding that the company was working on additional plant-based products.

JP Morgan has an overweight rating with a $120 price target.

Both Bernstein and JPMorgan have downgraded the stock on valuation concerns. "As we wrote last week, "At some point, the extraordinary revenue and profit potential embedded in BYND... will be priced in" - we think this day has arrived".

24/7 Wall St. covered the post-earnings analyst reaction on Beyond Meat, and the company's own guidance called for net revenues to exceed $210 million with adjusted EBITDA to break even.

Still, Beyond Meat has never made an annual profit, losing US$30 million a year ago.

Beyond Meat's stock had soared more than 570% from its initial public offering price as of the market close on Monday. It's also facing increasing competition from other "new meat" companies like Impossible Foods. United States sales of plant-based meats jumped 42 per cent between March 2016 and March 2019 to a total of US$888 million, according to Nielsen. At center stage of the plant-based meat movement is Beyond Meat Inc.

And demand is expected to continue to grow.

Separately, Beyond Meat said on Tuesday it would start selling a new version of its flagship vegan burgers, which look and cook more like traditional beef, as it battles for space in the meat section of USA grocery stores. Consulting firm Euromonitor predicts worldwide sales of meat substitutes will increase 22 per cent by 2023 to a total of US$22.9 billion.

The new Beyond Burger boasts 20g of plant-based protein per 4oz patty, features a simplified ingredients list and is said to have a more natural flavour and aroma profile. The company sells its products under the Beyond Beef, Beyond Chicken, The Beyond Burger, Beyond Meat, Beyond Sausage, Eat What You Love, and The Cookout Classic brand names.

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